Feb. 5, 2014 - 03:49PM
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Nexter Munitions has placed its first order with Rheinmetall Nitrochemie ammunition components. / Rheinmetall

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BONN — Nexter Munitions, part of France’s Nexter group, has placed its first order with Rheinmetall Nitrochemie under a new long-term supply agreement for ammunition components.

Rheinmetall offered no details about the Feb. 5 order, which falls under a November skeleton agreement with the Nexter subsidiary that the German company announced only on Feb. 4.

The 10-year arrangement covers the supply of Rheinmetall Nitrochemie propellant powder for existing types of large-caliber ammunition for artillery and tanks as well as for medium-caliber ammunition for the domestic and international markets. Furthermore, there will be a focus on the development of new propellant technologies and new types of ammunition for new markets.

“Rheinmetall expects orders with a total sales volume in a three-digit-million euro sum over the whole period of this skeleton agreement,” a company spokesman said.

With locations at Aschau in Germany and Wimmis in Switzerland, Rheinmetall Nitrochemie is the propellants division of Rheinmetall Defence. The company holds 51 percent of the subsidiary with the Swiss company RUAG holding the other 49 percent. Rheinmetall Nitrochemie’s core competencies are the development and manufacturing of propellants and propelling charges for military and civilian requirements. According to Rheinmetall, it is one of Europe’s largest producers of propellant powder.

Rheinmetall Nitrochemie has worked with Nexter and the French procurement agency DGA for more than 15 years. According to Rheinmetall, thislong-term supply agreement will make a big contribution to capacity utilization at both of the company’s plants.

Nexter was unavailable for comment.

The Nexter Munitions division makes €130 million euros (US $175 million) to €150 million euros in annual sales, has a strong operating profit margin and invests a large amount in research, the company said on its website.